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Describe the Use and Limitations of CAATs

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Describe the use and limitations of CAATs.


Definitions:

Draft

Any instrument (such as a check) drawn on a drawee (such as a bank) that orders the drawee to pay a certain sum of money, usually to a third party (the payee), on demand or at a definite future time.

Drawee

The party that is ordered to pay a draft or check. With a check, a financial institution is always the drawee.

Payee

The individual or entity to whom a payment is to be made or has been made, typically in the context of financial transactions.

Promissory Note

A written promise to pay a specified sum of money to a designated person at a fixed or determinable future time.

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